Trends in Job Instability and Wages for Young Adult Men. IEE Working Paper No. 8.

To determine whether there has been a secular rise in job instability among young adults over the past 3 decades, a study compared two National Longitudinal Survey cohorts of young white men. The first cohort entered the labor market in the late 1960s and early 1970s, the second during the late 1970s and early 1980s. The study examined longitudinal data on work history and schooling and found a significant increase in the rate of job changing across the two cohorts. The trend toward lower marriage rates and longer transitions into the labor market explained some increase. The economy's shift toward the service sector played an important role, although declines in stability occurred in traditionally unionized industries as well. The overall rise in instability resulted in shorter median tenures. Although greater job instability and shorter tenures are not necessarily a bad thing, findings indicated young workers in recent years failed to capture the all-important wage gains that were associated with job changing in the past. This deterioration in wage gains was felt largely by less educated workers, but inequality in these gains also increased for all education groups. In combination, findings suggested a decline in the long-term economic welfare among those who entered the labor market in the 1980s. (Appendixes contain the following: 43 references; comparison of estimates of job change rates; adjusting for attrition; permanent wage estimation; 5 tables; and 5 figures.) (Author/YLB)